Second supplementary budget approved despite complaints

Despite complaining about wasteful expenditures, MPs on Thursday gave the nod to the government’s second supplementary budget for fiscal year 2023.

The €361 million budget bill passed with 45 votes for, and three abstentions.

The fiscal burden comes to 0.85 per cent of GDP, as €116 million of the €361 million concerns intra-governmental transactions – transactions between government entities.

The biggest spending item was the €60 million extra on the Cost of Living Allowance covering the second half of the year.

Equalling that was €60 million for implementing co-financed projects and grant schemes. Other big items included €59 million for the purchase of desalinated water, a €56 million government grant to the University of Cyprus for development projects and operating costs, and €25.4 million for the purchase of the ‘Metropolitan’ building to house the ministry of labour.

The labour ministry wants to relocate as their current premises are considered structurally unsafe. However, the auditor-general has serious reservations about the transactions. It says the ‘Metropolitan’ should go for around half the price of what the state will be paying.

The auditor-general argues that as long as the Republic possesses state land which can be utilised for constructing buildings and at advantageous prices for the taxpayer, this should be the primary option.

Elsewhere, the supplementary budget features €18.2 million for subsidising electricity bills (for certain categories of people only), a €15.8 million grant to the University of Technology (Tepak) for new student dorms, and €15.6 million allocated to hosting displaced persons from Ukraine.

The budget further includes €18 million for the purchase of medicines and vaccines for Covid-19.

On this, Diko MP Christiana Erotokritou said the funds would not be used.

“I hope it’s the last time that taxpayers will pay €18 million on medicines that will end up in the bin,” she said.

The first supplementary budget of the year (€75 million) had passed back in April.